Market Overview

On Monday, Brent crude futures for November delivery slipped 2.5% to $90.35 per barrel, while U.S. West Texas Intermediate (WTI) futures for October fell 2.4% to $84.95 per barrel after a week of gains of more than 7% for Brent and nearly 6% for WTI.

Hormuz Shipping Traffic

Iranian media reported that Tehran allowed a number of Iraqi oil tankers to transit the Strait of Hormuz, though the exact count and volume were not disclosed. Shipping‑tracker data from Kpler showed 121 vessel crossings last week, a 2.5% increase from the previous week. Laden vessels (partially or fully loaded) declined 27%, while sanctioned crossings rose to 16 from 9. Prior to the Middle East conflict, more than 100 ships typically crossed the strait each week.

Geopolitical Context and Risks

The United States and Iran continue to dispute control of the strait. Tehran has demanded that the U.S. end hostilities on all fronts and unfreeze frozen Iranian assets before the waterway can be fully reopened. Shipping risks remain elevated in the Red Sea, where a Yemeni Armed Forces official said a Saudi oil tanker was hit by a missile off Yanbu, and the United Kingdom Maritime Trade Operations reported a projectile striking a tanker west of Yanbu.

U.S. Sanctions Initiative – “Operation Economic Outcast”

The U.S. unveiled a new sanctions campaign titled "Operation Economic Outcast". Treasury Secretary Scott Bessent told reporters that the Treasury had mapped every node, facilitator, and network used by Iran to obtain oil and sustain its economy, and that the operation would “tighten the noose” on revenue streams feeding the Islamic Revolutionary Guard Corps. President Donald Trump was said to be making phone calls to foreign governments urging banks to cease dealings with Iran, though no specific countries were named.

Bessent indicated that the Office of Foreign Assets Control (OFAC) was sanctioning over 60 entities and that any secondary sanctions would target Iran’s digital assets, technology, gold, aviation, and shipping sectors. When questioned about potential sanctions on Chinese banks, Bessent replied, “We want to make clear here today that no one is above the reach of U.S. sanctions,” noting that China and India are among Iran’s biggest oil importers.

Iran’s National Security Council Secretary Mohsen Rezaee warned that if the economic war continued, “not a single drop of oil will be exported” through the Strait of Hormuz or elsewhere in the Persian Gulf, and cautioned neighboring Gulf states against cooperating with the United States.

U.S. Strategic Petroleum Reserve (SPR) Drawdown

Data from the U.S. Department of Energy showed that crude oil inventories in the Strategic Petroleum Reserve fell by 3.7 million barrels in the week ending 21 August, bringing the total to 289.7 million barrels, the lowest level since November 1982. The drawdown is part of an agreement to release 172 million barrels since early March, contributing to a broader coordinated release of 400 million barrels by the 32‑member International Energy Agency (IEA) coalition aimed at stabilising global energy prices.

Summary of Key Figures

  • Brent: $90.35/bbl (‑2.5%)
  • WTI: $84.95/bbl (‑2.4%)
  • Hormuz crossings: 121 vessels (+2.5%)
  • Sanctioned Hormuz trips: 16 (up from 9)
  • Laden vessels: down 27%
  • OFAC sanctions: >60 entities
  • SPR inventory: 289.7 million barrels (‑3.7 million, lowest since 1982)